BANI WALID, Libya, Oct 24 (Reuters) - Forces loyal to
Libya's government took control of the former Gaddafi stronghold
of Bani Walid on Wednesday, commanders said, after weeks of
fighting that have underlined the weakness of central authority
more than a year after Libya's revolution.

Pro-government fighters shouted "Bani Walid is free!" as
pick-up trucks mounted with weapons poured into the centre of
the isolated hilltop town, one of the last to surrender last
year to the rebels who toppled Muammar Gaddafi.

Thousands have this month fled the bloodshed between rival
militias, and pockets of resistance were still reported on
Wednesday on the outskirts of Bani Walid, some 170 km (105
miles) south of Tripoli.

Bent on making their mark on a town they say still harbours
many of the late dictator's followers, pro-government forces
fired rocket-propelled grenades and anti-aircraft weapons at
empty buildings.

Heavy gunfire thundered non-stop and smoke billowed over
part of the town.

The fighters cried "Allahu Akbar!" (God is Great) and "Today
Bani Walid is finished!", honking car horns and blasting
patriotic music from their trucks.

Some of them climbed onto the roof of one building to hoist
Libya's tricolour flag and then fired their rifles in the air.

Posters of Shaban as well as historical Misrata hero Ramadan
al-Swehli hung atop one town-centre building. But next to it, a
coffee shop stood empty with its plastic chairs still outside,
and residents were notably absent from main streets.

"BANI WALID IS FREE"

"On this day - Oct. 24 - Bani Walid is free. There are no
more Gaddafi militias inside," said Fathi Shahoud, a commander
of Libya Shield, a grouping of militias operating under the
umbrella of the Defence Ministry. "Now we control the city and
we will stay to ensure safety."

Tarek Nouri Abu-Shabi, a 21-year-old member of the Free
Libya militia, said: "The revolutionaries have been in control
since yesterday. These are rebels from Misrata, Tripoli and from
other places. There are still small pockets of fighting on the
outskirts. We found weapons inside the town."

Pro-government forces moved on Bani Walid this month after
Omran Shaban, the fighter who found Gaddafi hiding in a drain in
Sirte two months after rebels took Tripoli, died following two
months of detention in the town.

The standoff highlighted the Tripoli government's inability
to reconcile groups with long-running grievances, as well as its
failure to bring many of the militias that deposed Gaddafi fully
under its control.

The pro-government militias set out to find those suspected
of abducting and torturing Shaban, and the national congress
gave Bani Walid a deadline to hand them over.

"The military act is now finished. We now are working to
make the city stable and more secure," army chief of staff
Youssef al-Mangoush told reporters. "That doesn't mean that
there isn't some resistance here or there. Now the government is
in charge."

He said the pro-government forces had freed a number of
people from detention and captured some fighters who used to
belong to Gaddafi's son Khamis's brigade.

THOUSANDS FLED

According to the Libyan state news agency, the clashes in
Bani Walid killed at least 22 people and injured hundreds.
Thousands of families fled, saying there was no water or
electricity in the city and a shortage of food and medicine.

There were unconfirmed reports on Tuesday of retribution by
pro-government forces.

"The militias have entered the suburbs with bulldozers and
have begun to demolish homes without reason," Abdel-Hamid Saleh,
a member of a Bani Walid civil society group, said by phone.

"A woman called me yesterday screaming 'They have come for
me, they have come for me' in fear. The city is falling on our
heads."

The Bani Walid General Hospital was evacuated this week
when, according to residents, it came under a rocket and mortar
barrage.

"The patients have been moved to hiding places, homes and
mosques because they were under fire in the hospital," tribal
elder Mohammed al-Shetwai told Reuters.

A Reuters team was unable to reach the hospital on Wednesday
because of widespread shooting.

The International Committee of the Red Cross said it had
previously delivered surgical supplies to treat around 100
patients wounded by shooting inside the city, as well as other
urgently needed medical supplies.
(Additional reporting by Hadeel Al-Shalchi; Writing By
Marie-Louise Gumuchian and Hadeel Al-Shalchi; Editing by Kevin
Liffey)